Caribbean Economic Performance Report

Available from: 
June 2014
Paper author(s): 
Caribbean Center for Money and Finance
Topic: 
Macroeconomics - Economic growth - Monetary Policy
Fiscal Policy - Public and Welfare Economics
Year: 
2014

EXECUTIVE SUMMARY

GLOBAL ECONOMY
Global economic growth slowed in 2013 to three per cent compared to 3.2 per cent in 2012. The growth rate in advanced economies slipped to 1.3 per cent and that in emerging and developing economies to 4.7 per cent. Within the advanced economies group, recession continued in the Euro area and the USA growth rate decreased from 2.8 per cent to 1.9 per cent. In the emerging and developing economies group, China’s growth rate remained constant at 7.7 per cent, Brazil’s increased from one per cent to 2.3 per cent, while India and Latin America decreased slightly to 4.4 per cent and 2.7 per cent respectively. Among the encouraging signs are the fall in unemployment in advanced economies, a faster rate of expansion of global trade, including exports from emerging and developing economies, and resilient growth in world tourism.

ECONOMIC GROWTH, INFLATION AND EMPLOYMENT
Most countries experienced upswings in the level of economic activity in 2013. The weighted average economic growth rate for the region increased from 1.7 per cent in 2012 to 2.4 per cent in 2013. There was robust economic growth in Guyana, Suriname and Haiti, but economic decline in Aruba, Jamaica and St Lucia. Inflation subsided in all countries in 2013. This was due primarily to falling world prices for food and energy. Based on unemployment data for the five countries which reported this data, labour market conditions might have improved in some countries and deteriorated in others during 2013. Unemployment rates decreased from 14.4 per cent to 11.7 per cent in Belize and from five per cent to 3.71 per cent in Trinidad and Tobago but rose from 14.4 per cent to 15.4 per cent in the Bahamas and from 13.9 per cent to 15.3 per
cent in Jamaica.

PROSPECTS FOR 2014
The outlook for 2014 is slow growth in most of the individual economies. IMF projections show eight countries growing faster in 2014 than in 2013 but no faster than 2.7 per cent. In the countries projected to grow less rapidly in 2014, namely Guyana, Haiti and Suriname, the growth rate is expected to be in the region of four per cent.Inflation rates are projected to increase in ten of the 14 countries, with inflation abating in only Barbados, Jamaica and Trinidad and Tobago. The external balance is expected to improve in eight countries and to deteriorate in five
others. Government finances are projected to remain problematic with the primary balance expected to deteriorate in five countries and with the gross debt ratio increasing in 12 countries, including countries which are already highly indebted.

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